Strategic Benefits of Airport Proximity and Foreign Trade Zones
March 16, 2022
Sentry BioPharma Services, Inc. (“Sentry”), specializes in providing cold chain storage and distribution services to the life science industry with a focus on large molecule pharmaceutical substances that are typically highly temperature sensitive. Sentry broke ground on its location adjacent to Indianapolis International Airport in 2006.
The location is extremely important for Sentry, because it serves a strategic purpose, Alex Mitchell, Sentry’s Director of Operations explains. The airport, which is just minutes away from the facility, serves 12 major airlines with more than 280 daily flights. Furthermore, proximity to FedEx’s second largest hub enables Sentry to capitalize on late drop times, promoting effective west coast and global pharmaceutical distribution. FedEx has announced and is underway to construct an additional runway at Indianapolis International Airport, via a ~$1.5 Billion infusion into the Indianapolis hub. This will further extend the reach of Indianapolis, both domestically and globally.
It is also located less than four hours from O’Hare International Airport in Chicago, Illinois, which directly serves many international cargo destinations. Memphis International, Louisville International, Cincinnati International, and Chicago International Airports are all within close proximity of Sentry and are also each within the list of the top 10 busiest cargo airports within the US. Additionally, four major interstates convene in Indianapolis (I-65, I-69, I-70 and I-74), providing one day driving access to 80% of all U.S. businesses.
All of these factors help Sentry provide reliable, flexible services and timelines for its clients. However, one of the most important benefits of Sentry’s location in Indianapolis is its status as a Foreign Trade Zone (FTZ), which was part of the initial planning for Sentry even before ground was broken, says Tim Mitchell, Sentry’s President/CEO.
What is a Foreign Trade Zone?
A Foreign Trade Zone is a secure area supervised by the Customs and Border Protection in which domestic and foreign merchandise are treated as being outside the U.S. trade boundaries.
According to Tim, “The benefits of our FTZ include Duty Exemption/Reduction as well as Merchandise Processing Fee (MPF) reductions. It is possible to completely avoid paying duties by utilizing the FTZ. Except for exports to Canada and Mexico, there are no duties on re-exports, meaning that a company can import to an FTZ and then export to another country without ever having to clear customs or pay duties or excise tax. When using an FTZ, companies are only required to pay MPF when their goods are entering U.S. Customs territory. In addition, companies using an FTZ can file a single entry for all the goods they ship from the FTZ in a consecutive seven-day period.”
Benefits of an FTZ also include capabilities to bring pre-IND, NDA, ANDA, BLA and EUA materials into a facility geographically located in the United States, without having final regulatory clearance for import, according to Alex. “The FTZ can support initial clinical trials and commercial product launches, especially as materials can be manipulated/packaged within the zone, while awaiting clearance. Materials can also be held indefinitely in the USA within Sentry’s FTZ, until such a time as further manipulation, export or import activities are required. This process is driven by Sentry’s clients and supported by Sentry in a consultative approach, to ensure maintenance of compliance and supply chain integrity. Additionally, the FTZ allows for materials to be brought directly into GMP inventory control from their US port of entry, without having to await customs clearance,” Alex said. “This can be especially beneficial for temperature sensitive and high value materials.”
All of these benefits are offered directly to Sentry’s clients. For example, Tim explains that temperature sensitive materials may be transported by bonded truck from the nearby Indianapolis airport to Sentry’s facility (a 15-minute trip) and be placed directly into the appropriate GMP storage environment without any risk of a Customs, DEA or FDA delay at port of entry. The material can then remain in the FTZ and be cleared for further transport within the U.S., when the appropriate regulatory approvals have been received.
Sentry also offers custom batch record-controlled labeling, kitting, and packaging services and maintains an FDA labeler code. Materials such as investigational drugs can come to Sentry’s FTZ, be labeled, kitted, packaged, and stored in a controlled cold chain environment according to GMP requirements before being shipped out to foreign clinical sites without ever having to clear U.S. Customs. In essence, the material is then never in U.S. commerce, though can be stored and secondarily packaged in a controlled environment, for further export.
Sentry has supported several BLA- and EUA-based launches with great success by reducing product time to patient and the risks associated with manufacturing drug products outside of the U.S. The FTZ and its close proximity to the Indianapolis International Airport are just two of many advantages that Sentry provides for our pharmaceutical clients to ensure their drug products reach the market safely, efficiently and with proper efficacy.